(BLOG): June 7, 2013 — Latest figures from Analysys Mason forecast that the number of M2M device connections worldwide will increase from 124 million in 2012 to 2.1 billion in 2021. This, says Thad Dupper (pictured) of Evolving Systems, opens up revenue-generating opportunities for service providers, but capitalising on them is not straightforward…
… as the varying range of devices in the market offers complex connection challenges. As the market develops, operators must recognise that the opportunity is unique, and establish specialised machine-to-machine (M2M) infrastructure to give themselves the best chance of significant market share and optimum profits. To maximise the opportunities presented by the growing number of connected devices, operators are starting to identify the key markets and business models that they are best able to serve and generate profit from.
This is made complex by almost every M2M device having a different value chain compared to mobile phones and other mobile devices sold by network operators today. For operators, the economics of the way they provide connectivity for M2M devices and services is critical – and to take advantage of the opportunities, they need to manage M2M connectivity in a different way to the way they manage regular consumer mobile devices.
For example, many M2M devices are infrequent transmitters – this means they need to connect to the wireless network a few times a day, week or month, will often connect for a short time, and may only send small amounts of data. Treating these devices the same way as mobile phones – which are mostly always-on, sending and receiving data frequently and spontaneously – is inefficient, ineffective and wasteful of resources.
Simply having to allocate an MSISDN to every M2M device will often be a barrier to growth. MSISDN inventory is a valuable asset to an operator, and allocating much of it to devices with low average revenue per user (ARPU) is not cost-effective – and represents a significant risk to the business if device connectivity is not carefully managed.
Many operators are already investing in M2M service delivery platforms, often including a portal for M2M Enterprise Customers, and handling requirements like asset management, device on-boarding and configuration, billing and diagnostics.
The next phase of the M2M ‘build-out’ will see new systems in the network which will control when, and how, M2M devices are allowed to connect – without those devices needing to be provisioned in the conventional sense. By integrating these new connectivity services platforms at the network level, with the service delivery platforms being developed today, it will be possible to better control device connectivity.
Operators can also start to mitigate the risks of an increase in scale by recognising the different connectivity requirements of M2M devices and deploying a connectivity services platform that manages these according to emerging M2M business needs. This new approach enables an operator to support millions of M2M devices without provisioning them in regular network elements and without allocating MSISDNs permanently to every device.
This suits it to any M2M application that can be designed around a temporary connection to the network, where the connection is initiated by the M2M device. So the new approach helps operators address risk, but by helping them scale their M2M business while at the same time saving money and resources, it also drives future growth.
The author is Thad Dupper, chairman and CEO, Evolving Systems
(Pictured: Thad Dupper, CEO and president of Evolving Systems with
his product, a SIM card. Photo by Kathleen Lavine. 10/2012.)
